Question 1

Since 1950,recessions in the United States

Accepted Answer

A) have not occurred. 
B) have become more severe than before 1950. 
C) have become less severe than before 1950. 
D) are about as severe as they were before 1950.

Question 2

Outline the various actions the government sector could take to promote growth.

Accepted Answer

The answer of Outline the various actions the government sector...

Question 3

The only way the standard of living of the average person in a country can increase is if ________ increases faster than ________.

Accepted Answer

A) production;population 
B) population;GDP per capita 
C) population;production 
D) population;income

Question 4

Which of the following will result in an increase in labor productivity?

Accepted Answer

A) a decrease in the number of people attending institutions of higher education 
B) a decline in the amount of human capital per worker 
C) an increase in technology 
D) a decline in the capital stock per hour worked

Question 5

Explain and show graphically how a decrease in household saving affects the equilibrium interest rate and the equilibrium quantity of loanable funds.

Accepted Answer

The answer of Explain and show graphically how a decrease...

Question 6

The demand for loanable funds has a ________ slope because the lower the interest rate,the ________ number of investment projects are profitable,and the ________ the quantity of loanable funds demanded.

Accepted Answer

A) negative;greater;greater 
B) negative;greater;lesser 
C) negative;lesser;greater 
D) positive;lesser;lesser

Question 7

Which of the following statements describes the experiences of Corning,Inc.since it was established in 1851?

Accepted Answer

A) strong uninterrupted growth in demand 
B) long-run growth interrupted by periods of business cycle recession 
C) little or no growth in the long run,and unaffected by the business cycle 
D) little or no growth in the long run,but very vulnerable to the business cycle

Question 8

Which of the following will not occur as the result of a decrease in net taxes?

Accepted Answer

A) decreased household saving 
B) decreased government saving 
C) a shift to the left of the supply curve for loanable funds 
D) all of the above

Question 9

Table 21-2
 $$\begin{array} { | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Real GDP (billions } \
\text { of 2000 dollars) }
\end{array} \
\hline 2013 & \$ 10,100 \
\hline 2014 & 10,950 \
\hline 2015 & 11,425 \
\hline 2016 & 11,300 \
\hline
\end{array}$$
-Refer to Table 21-2.Using the table above,what is the approximate growth rate of real GDP from 2015 to 2016?

Accepted Answer

A) -2% 
B) -1% 
C) 1% 
D) 2%

Question 10

Since 1900,real GDP in the United States has grown

Accepted Answer

A) more rapidly than the population. 
B) more slowly than the population. 
C) as rapidly as the population. 
D) in a random unpredictable manner relative to the population.

Question 11

Article Summary
According to the Office for National Statistics in the United Kingdom,productivity in the UK in 2014 was well below the average of the G7 countries,only faring better than Japan.The G7 is a group of the seven most industrialized countries,and includes Canada,France,Germany,Italy,Japan,the United Kingdom,and the United States.Compared to the G7 average,the UK was 20% less productive per hour worked,and output was also 20% worse when measured on a per worker basis.The productivity gap was the largest for the UK since estimates began in 1991.Worker productivity was lower in all of the G7 nations in 2014 than it would have been had trends prior to the 2007-2009 recession continued,with the productivity gap of 18 percent in the UK significantly higher than the 7% gap for the other G7 nations.In terms of output per hour worked,the UK was behind Germany,France,and the United States by 32 to 33 percentage points.
-Refer to the Article Summary.Labor productivity in the UK was well below the productivity in five of the other G7 nations,only faring better than Japan..Labor productivity is important for an economy because an increase in labor productivity

Accepted Answer

A) will increase the labor force participation rate. 
B) allows the average consumer to increase consumption. 
C) will create short-run,but not long-run,economic growth. 
D) will increase output and decrease wages in the long run.

Question 12

If labor productivity growth slows down in a country,this means that the growth rate in ________ has declined.

Accepted Answer

A) labor force participation 
B) the quantity of goods or services that can be produced by one hour of work 
C) the working-age population 
D) nominal GDP

Question 13

Explain why the demand curve for loanable funds has a negative slope.

Accepted Answer

The answer of Explain why the demand curve for loanable...

Question 14

Labor productivity will increase if the ________ increases and ________.

Accepted Answer

A) quantity of capital per hour worked;technology improves 
B) quantity of labor per unit of capital;technology improves 
C) quantity of capital per hour worked;immigration increases while capital is fixed 
D) quantity of labor per unit of capital;immigration increases while capital is fixed

Question 15

What is investment in a closed economy if you have the following economic data? Y = $10 trillion
C = $5 trillion
TR = $2 trillion
G = $2 trillion

Accepted Answer

A) $2 trillion 
B) $3 trillion 
C) $5 trillion 
D) cannot be determined without information on taxes (T)

Question 16

There is a federal budget deficit when

Accepted Answer

A) the government spends less that it collects in taxes. 
B) the government spends more that it collects in taxes. 
C) the government spends the same amount it collects in taxes. 
D) taxes are too high.

Question 17

The period of expansion ends with a ________ and the period of recession ends with a ________.

Accepted Answer

A) business cycle peak;business cycle trough 
B) business cycle trough;business cycle peak 
C) business cycle peak;business cycle peak 
D) business cycle trough;business cycle trough

Question 18

During the recession phase of the business cycle

Accepted Answer

A) production is usually rising. 
B) interest rates are usually falling. 
C) unemployment is usually falling. 
D) income is usually rising.

Question 19

Potential GDP in the United States

Accepted Answer

A) does not change over time. 
B) grows as the economy grows. 
C) changes over a given business cycle. 
D) declines over time.

Question 20

According to the "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?

Accepted Answer

A) less than 1 year 
B) 5 years 
C) 14 years 
D) 35 years

Exam 21: Economic Growth, the Financial System, and Business Cycles